New money laundering regulations are set to have a big effect on the property market, says a Wiltshire-based industry expert.
The changes make estate agents additionally responsible for carrying out checks on purchasers – when previously they just had to check vendors.
Dean Speer, a partner at Wiltshire property consultancy Myddelton & Major, believes the changes – which were introduced on June 26 – will have a significant impact on the property industry.
He said: “Whilst estate agents have been covered by money laundering regulations for a number of years, the new regulations will have a significant impact on the time and speed of property transactions.
“In the past, commercial and residential estate agents have been required to carry out money laundering checks on their clients – the person selling the commercial or residential property.
“They have been required to obtain detailed information on who the vendor is and who will benefit from money received from a transaction.”
Salisbury-based Dean added: “From June 26, all estate agents have also been required to be able to identify the purchaser and carry out money laundering checks on that company or person.”
The regulations require that estate agents secure this information at the point that an offer is accepted by the vendor.
Dean said: “In order to comply with the regulations, purchasers should now be ready to present identity details to the estate agent to whom they are making an offer.
“In the case of commercial properties that may be a company or partnership, the principal directors or partners will all need to present their identity information.
“On residential properties, it will be all of the purchasers, be that husband and wife, civil partners or others purchasing a property together.”
Dean added that the rules were very strict and in effect the agent would not be able to confirm a sale until that information has been presented by the buyer.
“It is going to be very important that buyers have all this information to hand, so the appropriate checks can be carried out swiftly to avoid delays.
“Buyers need to be ready to present a copy of their driving licence or passport, together with a utility bill, so they can prove their identity, their address and date of birth.
“Most estate agents now also use electronic data sources to verify the identity of the parties and to make sure they are not on exclusion lists provided by Government.
“Clearly it is very important to ensure that any attempts at using property transactions for criminal activity are prevented, but ordinary buyers and sellers need to be aware that this will be another step in an already quite time consuming process.
“Ensuring they are aware of the regulations, should help them to help estates agents move transactions forwards more speedily.”
